Appeals Court ruling lets municipalities set their own benefits

Getting a job transfer that sends you from Tucson to Flagstaff or Phoenix to Mesa or Tempe to Yuma may be an exciting change of scenery, but it can now also be a surprise when it comes to your benefits package from the company you work at. Love that allotted sick time you signed up for? That could change. What about enhanced retirement packages? That can very well change too.

The Court of Appeals upheld a ruling by a Maricopa County judge who expunged a 2016 law passed by the Arizona Legislature and signed by Gov. Doug Ducey. That law, according to the United Food and Commercial Workers Union and 32 Democratic lawmakers who sued, overruled a 2006 initiative that brought up the state’s minimum wage and provided local governments the right to ratify higher wages or increase benefits. The reasoning behind the judge’s support to toss out the 2016 law pointed to the notion that the efforts from the Legislature were infringing on the Voter Protection Act, a piece of legislation that restricts when lawmakers can alter voter-approved initiatives.

According to the new ruling, cities and counties in the state can now set their own job-benefits requirements for private companies operating within their boundaries. As long as the benefits meet statewide requirements, employees who transfer from one part of the state to another can see their benefits package change for better or for worse.

The ruling enhances the possibility that specific Arizona municipalities could either beef up or lean out benefits such as parental leave, scheduling certainty, or vacation policies among other benefits. One issue is that ambiguity could lead employees to look for work elsewhere, in more stable benefits conditions. The Appeals Court also affirmed the right of voters to create laws through initiatives and referendums.

An objection to the new ruling is that it could make certain municipalities more or less attractive compared to others for employers.

“Obviously, our hope was to try to eliminate the patchwork that exists from one city to the next,” State Senator J.D. Mesnard (R-17) said, who opposed the new ruling. “We wanted to remove the inconsistency that could exist so it would be less of a burden to our businesses. It’s not helping the cause. Once again, we’re right back to having businesses comply to different infrastructures.”

The appellate decision points to the courts continuing to go against the state Legislature’s moves to modify voter initiatives. It also depicts a loosening of concern around job-benefits decision-making to the degree that it could hurt job growth and economic development.

“If you’re a small business in one municipality, the moment you go into another one it’s different. It becomes exponentially more difficult because the infrastructure you designed no longer complies,” details Mesnard. “Expansion of businesses across the state will take a hit. They will have to comply with a patchwork of regulations.”

The attorney general’s office and the Court of Appeals were not available for comment during time of publication.